To Share or not To Share that is the Question

Due to TBLI Group’s unique network, we are often asked to “meet for coffee, catch up, share ideas, compare notes, etc”. This is code for I need to pick your brain to develop a strategy, find clients, find investors, find staff, find a job, or repackage my deck to get business. We were always happy to help educate others as this would ultimately create the inclusive values economy. That is our mission. Lately, I have been rethinking this. As more and more consultants, asset owners, fund managers and govt. agencies were contacting us, I started to look at what drives all of them. ROI (Return on Investment).

When I look at the ROI of what TBLI has done to build the community of ESG and Impact Investors, the industry has benefitted and the ROI is a big plus. My next question was has TBLI benefitted? What has been the ROI for TBLI? Have all these individuals who we have connected with strategic partners, investors, clients put something back. The jury is still out on that. Many have not.

Going forward should we not share? Should we not meet for the data dump, unless we are compensated? Should there be a clear donation to foundation, consulting jobs, sponsorship, conference attendance before assisting others.  Many have been extremely generous to TBLI and others working on an economy based upon well being.  How can one create a filter for those that feel by not sharing and closing their arms to have more will give them a leg up on others? I have often long conversations with other colleagues who’s work benefits the commons more than themselves. They all struggle on monetising their relationships.  I would be curious how you deal with this?

Not sharing would not be beneficial to us all. In the end, I am always amazed by the generosity of people, so I think this issue will resolve itself. People do surprise you. Even your teen age boys ultimately clean their room.

Let’s connect again at TBLI

For many of you, it has been a while since we last communicated. or some we still haven’t met or spoken. We traveled the world with our event this year and I’m happy to tell you we’ll be back in Zurich on Nov. 19-20 for TBLI CONFERENCE EUROPE 2015.

Let’s connect again or for the first time! Don’t forget to register

TBLI News

I am quite honoured to have been asked to join the advisory board of Lifestyles Magazine. Lifestyles Magazine is a 44 year old subscription only publication for high philanthropy. Looking forward to help them expand their content around Impact Investing.

IE Business School’s Net Impact Chapter will hold its 10th Annual Social Responsibility Forum in Madrid, Spain.  I have been asked to give the keynote speech at IE Forum November 27-28. Looking forward to meeting the MBA’s who want to embrace a values based financial system.

TBLI Social Entrepreneur

A very dear friend of mine, Khun Thippaporn Chearavanont has been very active as social entrepreneur in community development and real estate. She has been doing amazing projects taking the Green Building concept to new heights, by integrating health in her projects. Her company MQDC (Magnolia Quality Development Corporation) part of the DT Group  is very innovative in that they have been developing low carbon properties, where health is integral part of the experience. Congratulations.

Whizdom 101 is her latest project

Awesome

I looked up the definition of a commonly used word. Awesome: extremely impressive or daunting; inspiring awe: the awesome power of the atomic bomb. In the informal extremely good; excellent: the band is truly awesome! Why then is everything awesome? “I will call you back later”. “Awesome”. “See you next week.” “Awesome”. “I am going for a run”. “Awesome”. Why don’t we start being a bit discerning in what is awesome and what is just “fine”.

Cap and Share

TBLI has been working for its entire history on scaling up zero-low carbon investments. The solution always seemed very clear, carbon has to be a cost but no one wants to pay for it. In addition, the consumer was not included in most of the discussion around cap and trade.

Why don’t we go to a cap and share and give everyone an equal carbon allowance? If you are carbon efficient, take public transport or the bike, you can earn credits. If you can’t live without your ferrari, you buy credits. This way consumers can earn money by reducing carbon emissions. With everything being captured by big data, public transport chip cards, green credit cards and other new sources, it is doable.

That is what I call Awesome.

That’s what we’re missing. We’re missing argument. We’re missing debate. We’re missing colloquy. We’re missing all sorts of things. Instead, we’re accepting.

Studs Terkel

TBLI CONFERENCE EUROPE will be held on Nov. 19-20 in Zurich. Come and meet truly AWESOME people doing AWESOME things.

Support TBLI Foundation

 

Trust and Consequences

The daughter of a friend of mine called me about a Dutch Fraud Film festival. Would I have any examples of fraud to apply for the Fraud Film Festival Prize? The winner would receive funding to produce a documentary. I replied. “Wow. There is no shortage of examples”. Leonard Blankfein’s (Goldman Sachs CEO) Senate Hearings testimony came to mind.

If you look at this clip, it is quite amazing to see how Blankfein defends Goldman’s actions in a very circular reasoning that gets the viewer so confused that one loses the script. The basic question that Senator Levin asked was quite simple. “Is there not a conflict when you sell something to someone and then are determined to bet against that security and don’t disclose that to your client?”

Blankfein’s answer is stunning.

“Whoever is careless with the truth in small matters cannot be trusted with important matters.”
Albert Einstein
I look forward to greeting you at TBLI CONFERENCE EUROPE 2015 in Zurich November 19-20 and introducing you to people of integrity and trust.

TBLI Testimonial

“TBLI is not just a great place to increase one’s understanding about sustainable investing it is also an excellent place to meet and network; some of the contacts I have made at TBLI have turned into successful and lucrative business partnerships.”

Rufo Quintavalle-Poet, Investor and Director at Agro-Ecological Investment Management

Guest Blog: Rufo Quintavalle

Tracking errors are themselves an error

An article earlier this year in Institutional Investor pointed to low carbon indexes as an alternative to fossil fuel divestment for investors who are concerned about climate change. Citing the example of the Swedish pension fund, AP4, and the French pension fund, FRR, who both use this investment strategy the article describes these funds as “low-carbon equity indexes that closely track blue-chip benchmarks while excluding most carbon-exposed companies in those benchmarks.” Which, translated into terms that people outside of the financial sector can understand, means “a way to say you are doing something about climate change while not actually doing it”.
It is probably already too late to stop global warming of 2?C, although that remains the official goal that negotiators at the COP21 will be working towards. But what is certain is that if there is to be any hope at all of avoiding catastrophic climate change then the world economy will have to fundamentally alter. In such a context any strategy that proposes closely tracking “blue-chip benchmarks” is woefully inadequate since the “blue-chip benchmarks” simply reflect the reality of the world economy as it is and not as it should be.
Proponents of low carbon indexes would say that by excluding the most polluting companies they can contribute to an incremental change towards a low carbon future – companies will be pressurized to improve their performance in order to make it onto the index and a virtuous circle will be set in place. But in the same way that you cannot have your cake and eat it you cannot have an investment strategy that purports to address climate change while only accepting a tiny tracking error relative to the broader economy. The broader economy is itself part of the problem and if we do want to address climate change then what is needed is as large a tracking error as possible. Otherwise we will end up with low carbon indexes that by their own internal logic are obliged to invest in companies such as Royal Dutch Shell (the fourth largest holding of MSCI’s European Low Carbon Leaders Index) and Exxon Mobil (the third largest holding of the equivalent global fund).
The inadequacy of low carbon indexes to address climate change is, to be fair, not an indictment of institutions like AP4 and FRR who are, compared to their peers, among the more progressive of institutional investors. Rather it is an indictment of our financial system as a whole which, as it is structured will never be able to address climate change or indeed any other problem that is time-sensitive and requires systemic change. And ultimately this failure boils down to a philosphical failure regarding moral agency and the true nature of investment. If the goal of investing is simply to mimic the behavior of the broader financial market then the money managers and the people devising the indexes are doing a good job (although one suspects it is the kind of job that could be done just as easily by a computer). But if we are to understand investment as something that does not simply follow the markets but rather seeks to actively create value for society then our financial system is conspicuously failing.
So what to do in a context where the system as a whole is inadequate to serve society? And in which every single one of us is complicit in this problem the minute we take out an insurance policy or start paying into a pension plan? To those with no disposable income at all the most obvious course of action is to lobby your pension fund and your insurer to adopt a genuinely proactive policy on climate change and divest from fossil fuels. For those who do have disposable income to invest and are interested in using their investment dollars to combat climate change then you could consider investing this money outside the stock markets via angel investing, crowdfunding, private equity and other asset classes that your banker will do his or her best not to tell you about. The rewards here are far greater both financially but also in terms of accelerating the transition to a clean, green economy. And finally, since it is all too easy to point the finger at others we ought to examine our own collective responsibility in creating a state of affairs where “investment” has reduced itself to the buying and selling of shares in publicly listed multinationals who never needed our money in the first place.
Bernie Madoff was able to thrive as long as he did because there was a stream of people who liked the idea of a steady “no-risk” annual return of 10%. But ultimately if you are getting returns without risk that means someone else is picking up the bill. In the case of Madoff it was the new subscribers who were picking up the bill for the old ones. In the case of the broader financial system (of which low carbon indexes are merely a symptom) it is the planet as a whole which is picking up the bill for our obsession with “low-risk” listed equities and our refusal to rock the boat.

 

Follow your heart

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Believe it or not in a previous life (1975-1978), I had a carrier on oil rigs. My world wind career had me working offshore and on land in Iran, the North Sea (UK and Norway), France, Texas, Colorado and Oman (actually didn’t start, quit before I was sent there). In less than 2.5 years, I had a meteoric rise in oil and gas exploration, something that I never considered. I went from dishwasher, to roustabout (kind of go for), roughneck (guys who all seem to be missing fingers), derrick man (lonely person at top of oil rig snapping pipes with a rope into place to store them) and finally, Air Drilling Engineer.  This rapid rise surprised me. It wasn’t an inspiring job and as I got to see the environmental destruction we were doing, and the military hierarchy of that company (subsidiary of Schlumberger), further career moves upward were just not appealing.

It always seemed strange that I was sent to Iran to do air drilling, as I was not trained or experienced to do the job (air drilling in fractured formations to find oil or gas). Right place, right time, wrong job. I really enjoyed the theater working with some of the funniest characters, I would ever meet. Will always have great stories to tell and memories upon which to reflect. Some of my former colleagues were fantastic. I remember Jean who was a mechanic and started a goat farm, making cheese. He worked on the rigs to help get his business going and cover his costs, in order to follow his dream. He sent me a care package of wonderful goat cheese. I also learned some of the most obscene French expressions that would make even hardened criminals blush, and I still use them from time to time, as they are visually brilliant.

The CEO offered to fast track my career even more, in order to keep me from leaving. The finances were fine, and I worked 4 weeks on and then got 4 weeks holiday (6 months a year). I didn’t have to worry about anything. When you finished your 12 hour shift,  covered in mud, you dropped your clothes on the ground, and the next day, my room was clean and my work clothes were spotless. We ate wonderful French food, with wine and aperitifs. This was something American rigs wouldn’t allow. I remember having long periods of doing nothing, as we worked only if there was a problem with the drilling. If that happened, we would start up the compressors and perform air drilling. Other times, we would have a great deal of free time on our hands and would go exploring the remote areas of Iran. After 4 weeks of working, I had 4 weeks of holiday and I used that time to travel, which expanded my collection of characters. Yes it was very hard work. Hammering a pipe connection in 48 degrees celsius was very exhausting.

There was, however, something missing, I wasn’t happy or fulfilled and I still needed to find my passion. When I look at some of the photos of working on the rigs, I often think of a tv show called Dirty Jobs hosted by Mike Rowe and the podcast he made about how people doing horrible dirty jobs are financially secure and happy, even though they are not following their passion.

I wanted more. Not more stuff or money. I wanted to be fulfilled. What I am doing now, with TBLI, provides that in abundance. Most important, when I am really doing what fulfils me or am in “The Zone” , it costs me no energy, but actually gives me energy. Oh yeah, I don’t have to work in dangerous situations, like Hydrogen Sulphide (H2S) gas explosions, or losing fingers when running pipe back into the well.

Are you following your heart? Try it. You won’t regret it.

Looking forward to meeting you and others who are following their heart at TBLI CONFERENCE EUROPE 2015 in Zurich, Nov. 19-20.

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